s e p t e m b e r 2 0 1 0

pakistan’s roller-Coaster economy: tax evasion stifles Growths . A k b A r Z A i d iVisiting Scholar, South Asia Program

E N D O W M E N T F O R I N T E R N A T I O N A L P E A C E

POLICYBRIEF88

CARNEGIE

S u m m a ry

�� Over the last sixty years, Pakistan’s economy has seen severe ups and downs. Once considered a model for

other developing nations, Pakistan has been unable to sustain solid growth. Furthermore, a third of its

population now lives below the poverty line, and its literacy rate is abysmally low.

�� Pakistan’s economic instability stems in large part from low government revenue resulting from the elite’s

use of tax evasion, loopholes, and exemptions. Fewer than three million of Pakistan’s 175 million citizens pay

any income taxes, and the country’s tax-to-GDP ratio is only 9 percent. Tax evasion means fewer resources are

available for essential social services.

�� Pakistan spends too much on defense and too little on development: It has spent twice as much on defense

during peacetime as it has on education and health combined.

�� The government knows how to increase its revenue through tax reform, but the rich and powerful have

resisted such measures for fear of lowering their own incomes.

�� Without sufficient revenue the government will continue to be burdened with an unsustainable debt. It needs

to end tax exemptions for the wealthy and develop broader, long-term economic plans for sustainable growth.

�� In the past, the United States and other Western nations have come to Pakistan’s rescue by paying off debts

and funding development initiatives. Pakistan’s elite has no reason to support reform as long as these bailouts

come with no conditions attached.

2 CARNEGIE POLICY BRIEF

Once heralded as a beacon for other develop-ing countries, Pakistan’s economy bears little worthy of emulation today. For years now, it has fluctuated wildly between periods of impressive growth and dismal slumps. While political competition between the mili-tary and civilian politicians has been partly responsible for this instability, Pakistan’s lack of a proper tax and revenue regime has result-ed in high rates of tax evasion, burdening the country with unsustainable debt and under-mining its development priorities. Pakistan’s politics may recently have taken a turn for the better with the strengthening of demo-cratic institutions and the judiciary, but the key to the country’s economic prosperity—even its survival—is a far-reaching program of tax reform.

A topsy-turvy pAstOn January 18, 1965, the New York Times wrote: “Pakistan may be on its way toward” economic success “that so far has been reached by only one other populous country, the United States.” A year later the London Times struck a similar enthusiastic note, saying that “the survival and development of Pakistan is one of the most remarkable

examples of state and nation building in the post-war period.”

Forty years later, the press was offering a very different bouquet of sobriquets to describe Pakistan. International newspapers and magazines called it “the most danger-ous place in the world,” a “failed state,” and a “rogue state with a nuclear arsenal,” to name just a few. Only a few decades before, several far less developed countries, such as South Korea, Malaysia, China, and India, were considered far less likely than Pakistan to survive, much less thrive. Today, all of those countries and others have surged ahead of Pakistan economically.

Pakistan didn’t fall behind because it stood still; rather, its economic history spans six decades of roller-coaster ups and downs. The first decade, 1947–1958, was one of “settling down,” in which the new country comprising East and West Pakistan emerged from British India. The second period, 1958–1968, was marked by the rule of General Muhammad Ayub Khan and is now known as the Decade of Development for its high growth rates. Accompanying those high growth rates, however, were high income and regional inequality, which contributed to the

s. Akbar Zaidi is a visiting scholar

in the Carnegie Endowment’s

South Asia Program. Currently a

visiting professor at Columbia

University with a joint appoint-

ment in the School of

International Public Affairs and

MESAAS, the Department of

Middle Eastern, South Asian, and

African Studies, his research

focuses on development,

governance, and political

economy in South Asia. Zaidi

taught economics at the

University of Karachi from 1983

to 1996 before becoming a

visiting scholar at the University

of Oxford (1998) and later a

research fellow at the University

of Pennsylvania’s Institute for the

Advanced Study of India in New

Delhi (2002–2003). From 2004 to

2005 he was a visiting professor

at the School of Advanced

International Studies (SAIS), Johns

Hopkins, and in 2008 he was a

Reagan-Fascell Democracy Fellow

at the National Endowment for

Democracy. Zaidi’s next book,

Military, Civil Society and

Democratization in Pakistan, is to be

published by Vanguard Press,

Lahore, in October 2010.

About the Author

Bhutan

Pakistan

Afganistan

Tajikistan

Turkmenistan

Iran

Uzbekistan

India

Kazakhstan

Kyrkystan

Nepal

China

ISLAMABAD

LAHORE

KARACHI

DisputedTerritory

pakistan and its Neighbors

PAkISTAN’S ROLLER-COASTER ECONOMY: TAx EVASION STIFLES GROWTh 3

�Population 169.7 million

�Population 2.2%growth (annual)

�Life expectancy 65(years)

�Adult literacy, 68%male

�Adult literacy, 40%female

�Aid per capita 14(in USD)

�Infant mortality 73(per 1,000 births)

�GDP growth 3.7%

�GDP per capita 1.5%growth

�Urban 36%population (of total population)

Source: World Bank, 2010

pakistan in Context

0

5

10

15

20

25%

EXPORTS AND IMPORTS OF GOODS AND SERVICES (% OF GDP)

Imports Exports

1970 1980 1990 2000 2008

4 CARNEGIE POLICY BRIEF

secession of East Pakistan and the war that gave birth to Bangladesh.

In 1971 a new Pakistan emerged under the government of the left-of-center Zulfikar Ali Bhutto. Nationalization of private busi-nesses and public sector–led development were the norm for the new regime. Growth was relatively low compared to the decades before and after, but adequate under the dire and constrained circumstances of the

time. Following Bhutto’s ouster in 1977, General Muhammad Zia ul-Haq inaugurated Pakistan’s fourth “era,” ruling until 1988. Zia’s era saw the return of high growth rates, but it also saw the role of the military increase greatly in the economy, politics, foreign pol-icy, and in society more generally. Zia’s death brought a period of active civilian politics and electioneering. “Democracy” is perhaps too generous a term for this process. There

1947 Pakistan becomes independent nation-state

1958–1968 Ruled by General Ayub Khan; known as the Decade of Development; high growth rates; high income and regional inequality

1971 Growth is relatively low; nationalization of private businesses under Zulfikar Ali Bhutto; public sector–led development the norm

1977–1988 High growth rates under General Muhammad Zia ul-Haq

1988–1999 Numerous governments; debt crisis; high dependence on international loans; economic performance nosedives

1999–2008 Pakistan ruled by its third military dictator, General Pervez Musharraf; economy grows due to debt restructuring and large doses of foreign aid and assistance following the 9/11 terrorist attacks

dec. 2007 Assassination of former prime minister Benazir Bhutto

Feb. 2008 Prime Minister Yousuf Raza Gillani elected to head a coalition government

sept. 2008 President Asif Ali Zardari replaces General Musharraf

Nov. 2008 IMF lends Pakistan $7.6 billion; later increases loan amount to $11.2 billion

2008–2009 Growth rate of only 1.2%; inflation rate of 21%

2009–2010 Growth rate around 4%

July 2010 Total foreign debt rose to $55 billion

timeLiNe

PAkISTAN’S ROLLER-COASTER ECONOMY: TAx EVASION STIFLES GROWTh 5

were numerous governments between 1988 and 1999, and economic performance nose-dived as it never had before. From October 1999 to 2008, Pakistan was ruled by its third military dictator, General Pervez Musharraf. Pakistan’s economy grew again during this period, thanks to debt restructuring and large doses of aid and assistance. Several factors gave rise to these benevolent circumstances, the most important of which was the inter-national political atmosphere following 9/11. Since 2008, a democratically elected coalition government has been forced to deal with the collateral damage caused by its predecessor’s politics and economics.

Despite the rise-and-fall pattern of GDP growth over the last fifty years, Pakistan’s econ-omy has grown on average by more than 5 per-cent per year. This is no mean achievement. While many comparable countries in the region have also grown at similar or higher rates, Pakistan has the unenviable distinction of inconsistent growth. Other countries such as Malaysia, South Korea, and, of course, China have all had much higher growth rates over the same period, and they generally have been able to sustain those rates over decades. India too, which had a far slower growth rate than Pakistan’s from about 1947 to the 1980s, has not only improved its performance fundamen-tally over the last twenty years, but has also grown consistently for the past two decades, leaving Pakistan far behind. Even Bangladesh, once dismissed as a “basket case” by arrogant Pakistani economists and planners, has recently had several years of stable growth despite politi-cal uncertainty. What distinguishes Pakistan from these other countries is its inability to sus-tain good performance for more than five or six years. While India, China, Malaysia, Vietnam, and numerous other countries east of Pakistan have now emerged as regional and global economic and political powerhouses, Pakistan has barely stumbled along.

expLAiNiNG the up-ANd-dowN pAtterN Is Pakistan and its economy forever doomed to instability and stuttering growth? Why has Pakistan’s economy been so troubled? Does it have deep-rooted structural features that make it peculiarly susceptible to crises?

A major explanation of Pakistan’s volatile economic history is the state’s poor revenue generation. Low tax revenues are in turn caused by tax evasion and a legal structure that allows for too many exemptions and loopholes. Pakistan’s tax-to-GDP ratio is just

9 percent. This figure puts Pakistan in the 155th position out of 179 nations on the Heritage Foundation’s Index of Economic Freedom. Only oil-rich countries that impose few taxes perform worse. Fewer than three million of Pakistan’s population of 175 mil-lion pay any income tax. A huge and buoyant informal (underground) economy, estimated to be anywhere from 30 to 80 percent of the real economy, goes untaxed and unrecorded. These are the attributes of a rentier state, except that Pakistan lacks the wealth-produc-ing oil and gas reserves normally associated with such states.

Clearly, tax evasion and the inability of the regime to tax the informal sector mean that it has fewer resources for education, health, infra-structure, and development. A perennial debt crisis has affected Pakistan’s economy largely because its expenditures, many of which are justified, are well in excess of revenue, forcing the country to go to foreign (and domestic) borrowers. This indebtedness affects issues of political economy at the domestic and inter-national level.

the key to pakistan’s economic prosperity—even its survival—is a far-reaching program of tax reform.

6 CARNEGIE POLICY BRIEF

For example, the severe debt burden had been the single most important attribute of Pakistan’s economy through the 1990s. Overall outstanding debt was equal to GDP, and for-eign debt servicing alone in 2001–2002 was as much as 10 percent of GDP. Excessive tax evasion was the primary cause of this.

After 9/11, however, the Musharraf regime was able to sign agreements with bilateral and multinational donors to write off or resched-ule huge amounts of this debt, giving them unprecedented fiscal space. This fiscal free-dom was the main reason the economy turned around so sharply. Growth rose to 7.5 percent in 2003–2004 until maxing out the follow-ing year at 9 percent, the highest level in two decades. The fiscal deficit was near its lowest level in almost two decades, remittances were at historic highs, and exports crossed the $17 bil-lion mark for the first time and showed signs of

further growth. By 2006–2007, domestic debt had fallen to 30 percent of GDP, and foreign debt servicing was less than 5 percent of GDP. The government claimed that the economy had rebounded, that there had been a “turn-around,” and that good times of high growth and high human development had returned. Even the stock market soared to unprecedented levels, shattering records weekly.

Moreover, at some point between 2002 and 2004, Pakistan joined those 90 or so coun-tries that the United Nations Development Programme’s (UNDP) Human Development Report (HDR) puts in the category of “Medium Human Development.” From the time of the first annual HDR in 1990, Pakistan had consistently been classified as one of the 40 or so countries in the “Low Human Development” category. (By compar-ison, both India and Bangladesh moved from

39%

53%

8%

GDP CONTRIBUTION1949–1950

GDP CONTRIBUTION2009–2010

22%

25%

53%

Agriculture Industry Services and Trade

PAkISTAN’S ROLLER-COASTER ECONOMY: TAx EVASION STIFLES GROWTh 7

the low to the medium category in the late 1990s, well before Pakistan.) Many thought that, after years of being considered a “middle income country with low human develop-ment,” Pakistan had at last moved into a cat-egory that better reflected its economic and social characteristics.

Following the 2002–2007 period, Pakistan seemed set on a course for sustained economic improvement. Yet despite exceptional and unanimous support from the international donor community, little political opposition at home, and uninterrupted political stability and control of government (in sharp contrast to the eleven changes of government between 1985–1999), these few years of remarkable growth quickly unraveled.

reAsoNs For uNrAveLiNG Growth AbseNCe oF LoNG-term

pLANNiNG ANd iNvestmeNt

The boom of the Musharraf years unraveled so quickly because it was built on false founda-tions: largely, consumer-led growth and invest-ments in the speculative sector (real estate and the stock market) fueled by remittances and foreign aid. What was missing was a longer-term strategy to guide the money being sent to Pakistan into more productive sectors. Banks awash with excess liquidity were all too eager to feed the growing middle class with cheap loans to finance their consumption. This consumer-led boom did prompt the manufac-turing sector to ramp up production to meet increasing demand for cars, motorcycles, and other items, but it also helped create a bubble, which eventually burst.

The budgetary maneuvering space created by aid and debt write-offs did enable the gov-ernment to spend money on much-needed infrastructure. The resulting new roads and communication networks helped Pakistan, although they couldn’t keep up with the

increase in demand. The extent of the con-sumer boom had caught the government off guard, leaving it unable to provide the resources that the growing middle class required. The government’s inability to meet the huge spurt

in demand for electric power, for example, resulted in extensive power shortages that have hurt manufacturing and industry. the rouNdAbout oF poLitiCs

The governments of Generals Ayub (1958–1968), Zia (1977–1988), and Musharraf (1999–2008) were all, by definition, authori-tarian military dictatorships, though each had its own particular hue. Western powers sup-ported all three of them, but for very different reasons. All three were relatively benign com-pared to the ruthless Latin American dictator-ships of the 1960s, 1970s, and early 1980s. One could, moreover, say that Musharraf ’s rule was “softer” than the first two military dictatorships, with the former even being forced to follow the Constitution on numer-ous occasions. Nevertheless, the absence of political participation by the major parties marked all three regimes.

A key factor separating Pakistan’s military dictatorships from those of Africa or Latin America is their relatively short life spans. None of them managed to successfully pass off the baton to a military successor. Once politi-cal pressure began to emerge, the Ayub and Musharraf regimes crumbled (Zia was killed in a plane crash) because they excluded key civilian political actors.

while india, China, malaysia, vietnam, and numerous other countries east of pakistan have now emerged as regional and global economic and political powerhouses, pakistan has barely stumbled along.

8 CARNEGIE POLICY BRIEF

When civilians regained power, they tended to blame the military for Pakistan’s problems, regardless of whether such blame was justi-fied. The threat of yet another military coup hung over these civilian governments, weak-

ening them and thus creating the rationale for the military to intervene. The extremely short tenures of Pakistan’s elected governments left them no opportunities to craft long-term strategies.

The experiences of Pakistan’s neighbor India provide an important point of compari-son here. The Indian electorate rejected the “India shining” slogans of the Bharatiya Janata

Party (BJP)–led government of 1999–2004 in favor of a Congress-led government. Yet despite the intense antagonism between the Congress Party and the BJP, the political tran-sition was a smooth one. Of course, India is a mature democracy whereas Pakistan’s has had little opportunity to grow, but the example nevertheless shows that smooth political tran-sitions and high growth rates are not entirely foreign to the region.

Pakistan’s frequent regime changes aren’t the only reason that the country has never been able to engage in long-term planning. It is also possible that the system itself, regardless of whether civilians or the military are at the helm, encourages the rentier mentality. Recent events related to profiteers hoarding wheat and sugar, for example, suggest that corrup-tion continues to enjoy support from key elements of Pakistan’s society. Such systemic

0

200

400

600

800

$1,000PAKISTAN’S GDP OVER TIME

GDP per capita (in USD) GDP (in USD)

1960 1970 1980 1990 2000 2010

pakistani policy makers and politicians need to understand that they cannot go

on living on borrowed money forever.

PAkISTAN’S ROLLER-COASTER ECONOMY: TAx EVASION STIFLES GROWTh 9

corruption severely distorts the signaling func-tions of markets, and thus efficient develop-ment as well.

Low emphAsis oN humAN CApitAL

One of the paradoxes of Pakistan’s economy is its periodic achievement of high rates of growth despite being burdened with poor social indicators. Pakistan’s economic and social profile from 1993 to 2003 looked more like that of an African country, combining an abysmally low literacy rate with a skyrocketing population, poor treatment of women, and endemic poverty. Economic growth has done little to ameliorate Pakistan’s social problems.

One reason why investment in human capital has been so low is that defense expen-diture has been so high. In peacetime, military expenditure has exceeded 7 percent of GDP, twice the amount allocated to education and health combined. With debt service and defense taking up as much as 75 percent of the government’s annual budget throughout the 1980s and 1990s, very little remained for development.

In the age of globalization, such failure to invest in human capital bodes ill for Pakistan’s future. While Pakistan’s neighbor India, by contrast, has successfully diversified into ser-vices such as information technology, Pakistan has failed to do so, despite sharing one of India’s biggest advantages: a large English-speaking population.

One of the fundamental reasons Pakistan’s elite has failed to invest in human capital is its lack of appreciation for the idea of the public good. Short-term, narrow, and selfish inter-ests, whether class-, institution-, or ethnic-based, override the common good. It’s hard to understand why this behavior persists, and hence even more difficult to “solve” the prob-lems it creates, but at least recognizing it is the first step toward a solution.

tAx evAsioN—the Core issue?

There are at least two sides to Pakistan’s overin-vestment in defense (and thus its underinvest-ment in development). On the demand side, defense overinvestment derives from the per-

ception that “national insecurity” is a defining feature of the Pakistani state. This is both a cause and an effect of the military’s dominance of the country’s political economy. But there is a supply side to this issue, too. Essentially, if government revenues were higher, Pakistan might be able to fund both defense and devel-opment at a level more conducive to national well-being. The question remains: Why aren’t government revenues higher?

The main culprit is tax evasion. Pakistan’s tax evasion problem is caused by three things: poor legal frameworks and bureaucratic capa-bilities with regard to revenue extraction; cor-ruption in the form of a predatory class that privileges certain sectors and vested interests with unjustified tax “exemptions”; and elites who cut deals with the state to avoid taxa-tion, made possible by an anemic agriculture income tax (agriculture makes up 22 percent of Pakistan’s GDP, but only 1 percent of its tax revenue). Research suggests that with a more extensive, transparent, progressive, and equitable tax structure, government rev-enue could easily double, thus closing the huge gap between defense and development expenditures.

The fact that Pakistan—the world’s 26th richest country in purchasing power parity—

pakistan’s lack of a proper tax and revenue regime has resulted in high rates of tax evasion, burdening the country with unsustainable debt and undermining its development priorities.

10 CARNEGIE POLICY BRIEF

does so poorly when it comes to revenue gen-eration suggests that deep structural factors are at work. A small elite composed of the mili-tary, land owners, and the rising urban upper and middle classes, is loath to give up any of its wealth (some of which is illegally accumu-lated). Even the apparently forward-looking, enlightened, and modernist military regime headed by General Pervez Musharraf failed to restructure Pakistan’s tax regime, and backed

down in the face of a massive popular revolt to his proposal to register traders and shop own-ers. It’s unlikely that an elected government will do any better. Given their typically short political tenures, elected governments are too fearful of daggers in the night to propose bold, politically unpopular solutions. And despite their loud protestations to the contrary, oppo-sition parties would be no more likely to champion reform if they came into power.

Thus it isn’t that the military and civilian elite of Pakistan don’t know how to fix the problem; it’s that their short-sightedness and penchant for self-preservation make them not want to. Their certain knowledge that “the West will never let Pakistan fail” also gives the elite tremendous confidence in the status quo.

CoNCLusioNsIs there anything that can be done? Is Pakistan’s economy fated to hover perpetually near the edge of crisis? Perhaps not. Some positive

trends suggest that some of Pakistan’s liabili-ties may be receding. One must keep in mind, of course, that predicting Pakistan’s economic and political future is a game whose rules are extremely uncertain.

Despite the uncertainties, two observa-tions about the post-Musharraf period stand out. First, while Pakistan’s economic growth rate dipped considerably in 2008–2009 to 1.2 percent, it rebounded to about 4 percent the following year. This figure, although still low compared to earlier years, is respectable in a time of increasing internal terrorism and global slowdown, and it suggests that even in difficult times, economic growth is possible in Pakistan. It may also suggest that the under-lying structures in the economy have shifted much as they did two decades ago. In sharp contrast to its dismal performance in the 1990s and the period after Pakistan’s nuclear tests in 1998, Pakistan’s economy may have ascended to a higher, more stable plane. If Pakistan can perform so well when the rest of the world is reeling from a global recession, then a more forceful economic policy might produce truly exceptional results.

The second observation concerns the maturing of the political process, which sug-gests the possibility of greater continuity, a key requirement for economic stability. Despite numerous attacks, challenges, and tensions from within, Pakistan’s democracy has man-aged to weather the past two-and-a-half years fairly comfortably—so far. An assertive judi-ciary, a supportive civilian opposition, and a reticent, contemplative military have all helped to strengthen and deepen the political process of democracy.

Ever mindful of uncertainties, and keep-ing these two observations in mind, it is clear that the government will have to make several

pakistan spends too much on defense and too little on development: it has

spent twice as much on defense during peacetime as it has on education and

health combined.

PAkISTAN’S ROLLER-COASTER ECONOMY: TAx EVASION STIFLES GROWTh 11

decisions to break out of the high-low cycle and place the economy on a more stable foot-ing. First, it must undertake a comprehensive revision of the tax regime if it is ever to seri-ously tackle development, particularly in the social sectors. This can only happen if there is a political consensus to tax the rich. Given that many of the rich are elected policy mak-ers, this means that the elite will have to look past their strong, vested interests in the status quo. Forging such a consensus will require not just technocratic innovations but politi-cal settlements in which members of the civil-ian, political, and military elite come to some form of agreement on a long-term strategy for Pakistan’s political and economic future. The international community has a role to play, too. Multilateral agencies, the United States, and other countries must carefully reconsider their aid and loan packages to avoid creating a moral hazard. If large amounts of foreign assis-tance are always at hand when Pakistan nears a crisis, then Pakistan’s elite will have no incen-tive to look past the short term.

poLiCy reCommeNdAtioNs Pakistani policy makers and politicians need to understand that they cannot go on living on borrowed money forever. They must build a partisan consensus to tax the rich and the elite (mostly themselves) if they wish to bring Pakistan up to speed with other developing countries in the region.

They must eliminate unjustifiable tax exemptions and preferences given to sec-tors or individuals, and institute in its place a broader policy that taxes earnings and wealth, not activities.

Pakistan must improve documentation of the economy in order to better estimate taxable income and increase government revenue.

Pakistan’s leadership needs to rise above party politics and, with the advice and con-sent of a supportive opposition, implement a broader economic framework.

Donor countries need to recognize that they have bailed out Pakistan too often. They should instead pursue a “do more” approach, emphasizing tax and economic policies that can harness Pakistan’s huge underreported revenue potential. n

The Carnegie Endowment does not take institutional positions on public policy issues; the views represented here are the author’s own and do not necessarily reflect the views of the Endowment, its staff, or its trustees.

© 2010 Carnegie Endowment for International Peace. All rights reserved.

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Further reAdiNG

Visit www.Carnegieendowment.org/pubs for these and other publications.

issues in pakistan’s economy, S. Akbar Zaidi (Karachi: Oxford University Press, 2005). the political economy of military rule in pakistan: the musharraf years, S. Akbar Zaidi, Institute of South Asian Studies, National University of Singapore, Working Paper no. 31, January 2008. pakistan’s economy at the Crossroads: past policies and present imperatives, Parvez Hasan (Karachi: Oxford University Press, 1998). Final report of the panel of economists, medium-term development imperatives and strategy for pakistan, Planning Commission, Government of Pakistan, April 2010.

military, Civil society and democratization in pakistan, S. Akbar Zaidi (Lahore: Van-guard Press, 2010).

PakIstan’s ROLLER-COastER ECOnOmY: tax EvasIOn stIFLEs GROwth

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The Carnegie Endowment for International Peace is a private, nonprofit organiza-tion dedicated to advancing cooperation betweennations and promoting activeinternational engagement by the United States. Founded in 1910, Carnegie is nonparti-san and dedicated to achiev-ing practical results. Building on the successful establish-ment of the CarnegieMoscow Center, the Endow-ment has added operations in Beijing, Beirut, and Brus-sels to its existing offices in Washington and Moscow. The Carnegie Endowmentpublishes Foreign Policy, one of the world’s leading magazines of international politics and economics, which reaches readers in more than 120 countries and several languages.

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reSOUrCeS

Visit www.Carnegieendowment.org/pubs for these and other publications.

Financing energy efficiency in China, William Chandler and Holly Gwin (Carnegie Endowment for International Peace, 2007) www.carnegieendowment.org/files/chandler_clean_energy_final.pdf.

World energy Outlook 2007: China and india insights, International Energy Agency (Paris, OECD/IEA, 2007).

Climate Change Mitigation in developing Countries: Brazil, China, india, Mexico, South Africa,

and Turkey, William Chandler, Roberto Schaeffer, Zhou Dadi, P. R. Shukla, Fernando Tudela, Ogunlade Davidson, Sema Alpan-Atamer (Pew Center on Global Climate Change, 2002).

The role of CO2 embodiment in U.S.-China Trade, Shui Bin and Robert Harris (Energy Policy, Vol. 34, Issue 18, 2006).

Achieving China’s Target for energy intensity reduction in 2010, An exploration of recent

Trends and Possible Future Scenarios, Lin Jiang, Zhou Nan, Mark D. Levine, and David Fridley (Law-rence Berkeley National Laboratory, 2006) http://china.lbl.gov/publications/lbnl-61800.pdf.

realizing the Potential of energy efficiency (United Nations Foundation, 2007).

energy efficiency Policy and CO2 in China’s industry: Tapping the Potential, Wang Yanjia, Tsinghua University, Presented at the OECD Global Forum on Sustainable Development, Paris, IEA, March 20, 2006.

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